Table of Differences Between the Two Legal Types of Company Voluntary Arrangement (CVA)

Go for a freeze (moratorium) on creditors actions or not?

Topic	CVA No Moratorium	CVA with a Moratorium

1. Fact of existence of proposal must be advertised	No	Yes

2. Any size of company can apply	Yes	No

3. Nominee must report as to sufficiency of cash in the moratorium period	No (but best practice would be to report)	Yes

4. In the moratorium period
4.1 A winding up petition can be presented	Yes	No

4.2 A winding up order can be made	Yes	No

4.3 Landlord can take possession	Yes	No

4.4 Landlord can take a distraint	Yes	No

4.8 H.P Company can re-possess goods	Yes	No

4.9 Bank can appoint a receiver	Yes	No

4.10 Suppliers of public utilities may require payment of old debts as a condition of continuing to supply	Yes	No

4.11 The company cannot take credit of more than £250 (without advising the supplier	No	Yes

4.12 CVA must be advertised	No	Yes

4.13 Fact of moratorium must be displayed on letterheads etc	N/A	Yes

5. Creditors not notified of the CVA creditors will still be bound (post 1-1-2003)	Yes	Yes

From the above table it is apparent that a CVA with a moratorium is subject to many more regulatory requirements relating to disclosure

Chris Parkman

BSc Hons, FABRP, MIPA, FCCA, Insolvency Practitioner

chris@purnells.co.uk

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